2012 Vianna et al. Socioeconomics of sharks in Palau

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Socio-economic value and community benefits from shark-diving tourism in Palau:
A sustainable use of reef shark populations
G.M.S. Vianna a,b,⇑
, M.G. Meekan a
, D.J. Pannell c
, S.P. Marsh c
, J.J. Meeuwig b,d
a
Australian Institute of Marine Science, The UWA Oceans Institute (MO96), 35 Stirling Hwy, Crawley, WA 6009, Australia
b
School of Animal Biology, The University of Western Australia, 35 Stirling Hwy, Crawley, WA 6009, Australia
c
Centre for Environmental Economics and Policy, School of Agricultural and Resource Economics (M089), The University of Western Australia, 35 Stirling Hwy, Crawley,
WA 6009, Australia
d
Centre for Marine Futures (Oceans Institute), Oceans Institute, The University of Western Australia, 35 Stirling Hwy, Crawley, WA 6009, Australia
a r t i c l e i n f o
Article history:
Received 17 June 2011
Received in revised form 1 October 2011
Accepted 26 November 2011
Available online 23 December 2011
Keywords:
Conservation incentives
Management
Ecotourism
Marine protected area
Sanctuary
a b s t r a c t
Arguments for conservation of sharks based on their role in the maintenance of healthy marine ecosys-
tems have failed to halt the worldwide decline in populations. Instead, the value of sharks as a fishery
commodity has severely reduced the abundance of these animals. Conservation may be assisted by the
development of an alternative approach that emphasizes the economic value of sharks as a non-har-
vested resource. Our study quantifies the value of a tourism industry based on shark diving. Using data
collected from surveys, as well as government statistics, we show that shark diving is a major contributor
to the economy of Palau, generating US$18 million per year and accounting for approximately 8% of the
gross domestic product of the country. Annually, shark diving was responsible for the disbursement of
US$1.2 million in salaries to the local community, and generated US$1.5 million in taxes to the govern-
ment. If the population of approximately 100 sharks that interact with tourists at popular dive sites was
harvested by fishers, their economic value would be at most US$10 800, a fraction of the worth of these
animals as a non-consumptive resource. Fishers earn more selling fish for consumption by shark divers
than they would gain by catching sharks. Shark diving provides an attractive economic alternative to
shark fishing, with distribution of revenues benefiting several sectors of the economy, stimulating the
development and generating high revenues to the government, while ensuring the ecological sustainabil-
ity of shark populations.
Ó 2011 Elsevier Ltd. All rights reserved.
1. Introduction
Over the last 20 years, ecotourism based on viewing and inter-
acting with marine megafauna has become increasingly popular
(Higham and Lück, 2008). Examples of this type of tourism include
turtle and whale watching, snorkeling with seals, diving and snor-
keling with manta rays and shark diving (Anderson et al., 2011;
Anderson and Ahmed, 1993; Dearden et al., 2008; Dicken and
Hosking, 2009; Gallagher and Hammerschlag, 2011; Jacobson and
Robles, 1992; Kirkwood et al., 2003; Orams, 2002). The occurrence
of aggregations of megafauna in areas remote from population cen-
ters means that such tourism also provides significant benefits to
local economies, where few alternative sources of income may ex-
ist (Garrod and Wilson, 2004; Milne, 1990). Importantly, the devel-
opment of a well-managed ecotourism industry based on
megafauna provides the opportunity for local people to utilize nat-
ural resources in a sustainable manner over the long-term (Mau,
2008).
The economic value of tourism based on marine megafauna is
large. In 2008, a study of whale watching estimated that this form
of tourism was available in 119 countries, and involved approxi-
mately 13 million participants annually, generating an income to
operators and supporting businesses (hotels, restaurants and sou-
venirs) of over US$2.1 billion (O’Connor et al., 2009). This industry
is estimated to have the potential to generate annual revenues of
over US$2.5 billion (Cisneros-Montemayor et al., 2010). The devel-
opment of whale watching has been paralleled by growth in tourism
based on other types of marine megafauna. In particular, tourism to
observe sharks and rays has become increasingly common. At the
forefront of this relatively new market are industries that focus on
whale sharks (Rhincodon typus), with estimates calculated in 2004
suggesting that these generated more than US$47.5 million world-
wide, providing important revenues to developing countries such as
Ecuador, Thailand and Mozambique (Graham, 2004).
Diving with other species of sharks has followed a similar trend
of growing popularity. In 2005, it was estimated that approxi-
mately 500,000 divers were engaged in shark-diving activities
0006-3207/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.biocon.2011.11.022
⇑ Corresponding author at: GMS Vianna, Australian Institute of Marine Science,
UWA Oceans Institute (MO96), 35 Stirling Hwy, Crawley, WA 6009, Australia.
E-mail address: g.vianna@aims.gov.au (G.M.S. Vianna).
Biological Conservation 145 (2012) 267–277
Contents lists available at SciVerse ScienceDirect
Biological Conservation
journal homepage: www.elsevier.com/locate/biocon

worldwide (Topelko and Dearden, 2005). An increasing range of
opportunities for this type of tourism are available, including cage
diving, shark feeding and drift diving with reef and oceanic sharks.
Shark-diving tourism can be found in more than 40 countries
(Carwardine and Watterson, 2002), with new destinations and
target species being established rapidly, due to the increasing
recognition of the economic potential of this activity (De la Cruz
Modino et al., 2010; Dicken and Hosking, 2009; Gallagher and
Hammerschlag, 2011).
The presence of coral reefs and warm coastal waters that natu-
rally attract divers means shark diving can form an important and
valuable element of tourism in many developing countries
throughout the tropical Indo-Pacific and Caribbean (Gallagher
and Hammerschlag, 2011). However, the growing demand for
shark products, principally for shark fin soup, threatens the future
of these valuable industries (Clarke et al., 2007). Due to their con-
servative life-history traits of slow growth, low rates of reproduc-
tion and late ages at maturity, shark populations cannot withstand
high rates of exploitation and when depleted often take many
years to recover (Field et al., 2009). For this reason, fishing for
sharks both as a target species and as by-catch has severely re-
duced shark populations in many parts of the world’s oceans
(Baum et al., 2003; Field et al., 2009; Myers, 2003; Myers et al.,
2007), including tropical reef systems (Robbins et al., 2006;
Ward-Paige et al., 2010). This decline is likely to continue unless
governments and local people can be convinced of the economic
benefits of the non-destructive use of shark resources.
In the small island developing states of the Indo-Pacific, the ma-
jor obstacles to altering the perceptions of sharks are both histor-
ical and cultural. Fishing has provided the economic basis of
island societies for millennia and is still a central part of cultural
and economic life in many regions (Johannes, 1981). Fishing rights
and grounds are often managed through complex traditional sys-
tems by social units such as clans or villages (Brunnschweiler,
2009; Johannes, 1981) and in many cases small-scale shark fishing
is an important part of local culture (Watts, 2001). This stands in
marked contrast to the industrial-scale fisheries that supply the
demand for shark fin (Clarke et al., 2007). However, this cultural
heritage may predispose local people and governments towards
the primary view of sharks as a fishery resource.
Palau is unusual among Indo-Pacific nations in its recognition of
the importance of sharks as a tourism resource for the nation’s
economy. The coral reefs of Palau still host large populations of
top-order predators and this factor distinguishes the Palauan div-
ing experience from that available in many other places through-
out the tropics where sharks have been severely reduced in
numbers or eradicated by fishing (Baum et al., 2003; Myers,
2003; Myers et al., 2007). Diving with reef sharks and manta rays
are among the main attractions for tourists to the country (Anon,
2001). To protect this resource, the national government recently
declared the waters around Palau as a shark sanctuary. This initia-
tive prohibits the capture, sale or possession of shark and shark
fishing gear by all foreign vessels within Palauan waters.
The recognition of the contribution of reef sharks to the econ-
omy represents an important achievement by the government
and people of Palau as well as being of international significance.
However, the scale of this contribution is still unknown, since there
has never been a quantitative assessment of the value of sharks as
a tourism resource to the Palauan economy. The aims of the study
were to estimate the contribution of shark diving in Palau to (a)
business revenues from sectors related to the tourism industry,
(b) the income of fishers, (c) wages and salaries received by Palau-
an residents employed in the dive industry, and (d) government
tax revenue, with items (b) and (c) subsets of (a). Business reve-
nues from shark diving and fishers’ income attributable to shark
diving will be compared with estimated income from shark fishing
for the same resource. Data were collected using a series of stan-
dard questionnaires distributed widely among divers and tourist
operators. These were followed by interviews and other question-
naires with a wider range of stakeholders, including local fishers
and employees of the shark-diving industry. The information was
integrated into an economic model for the analysis.
2. Methods
2.1. Study area
The Republic of Palau is a complex of approximately 300 is-
lands, spread over an Economic Exclusive Zone (EEZ) that covers
629,000 km2
of the north Pacific (7°N Lat and 134°E Long). Palau
has a population of approximately 20,000 with roughly two-thirds
of the inhabitants living on the island of Koror (Fig. 1). In 2008, the
Gross Domestic Product (GDP) of Palau was estimated as US$218.4
million (Anon., 2010). Although subsistence agriculture and fishing
are important economic activities, the local economy of Palau re-
lies primarily on tourism, which attracts approximately 80,000
overseas visitors per year, generates more than US$1.5 million in
taxes from hotels and restaurants annually, and is one of the main
sectors of employment in the country (Anon., 2009; PVA, 2010).
The marine environment is the main draw-card for tourists to
Palau, particularly for diving and snorkeling (Anon., 2004). Palau
is recognized as a world-class diving location and the abundance
of large pelagic fish, most notably sharks, has established the coun-
try as a popular shark-diving destination (Carwardine and Watter-
son, 2002).
Shark diving in Palau relies on dive sites that host aggregations
of sharks that are predictable both in their numbers and timing of
appearance. Such sites tend to be on the outer reef slope near drop-
offs and are usually associated with strong tidal currents. Aggrega-
tions can be found at a number of dive sites, mainly on the slope of
the barrier reef, on the southwest side of the lagoon (Fig. 1). Typi-
cally, shark diving occurs during incoming tides, when the sharks
are swimming off the slope of the reef and divers can position
themselves at the edge of the drop-off using hook and line attach-
ments of the diver to the reef. According to the dive guides, the
number of sharks sighted by divers is related to the dive site and
tidal movements. The length of time of the experience varies and
is usually terminated by the divers due to no-decompression time
limits. Although several species of sharks can be found in Palau, the
shark-dive industry relies mainly on interactions with two species,
the whitetip (Triaenodon obesus), and the grey reef shark (Carcha-
rhinus amblyrhynchos), with the latter drawing most of the atten-
tion of the divers due to its size, abundance and behavior. In
2010, there were 18 licensed dive tour operators who offered dive
trips to popular shark-diving sites in Palau.
2.2. Survey
The socio-economic survey was based on four different ques-
tionnaires that collected information from people directly inter-
ested in, or affected by, the shark-diving industry in Palau. These
stakeholders included tourists, dive operators, dive guides and lo-
cal fishers (Table 1). This onsite survey was conducted in March
(pilot) and May/June 2010 and provided a total of 297 completed
questionnaires. Of this total, 246 respondents were divers (shark
and non-shark divers), 10 were dive operators, 20 were dive guides
working within the industry and 21 were local fishers (Table 1). A
pilot study trailed the survey questionnaire for divers as well as
providing a general profile of the tourists engaged in diving activ-
ities, including both shark and non-shark divers. This pilot was
structured as a face-to-face interview conducted by a single inter-
268 G.M.S. Vianna et al. / Biological Conservation 145 (2012) 267–277

viewer with a target sample size of 30 dive tourists. Divers visiting
Palau typically spend several days engaged in dive activities and
interviews were done after at least a few days of diving so that
tourists had sufficient experience and knowledge of the location
and their expenditures. The pilot study provided the basis for the
design of a self-administered questionnaire, structured to obtain
7°40'
7°20'
7°
134°40'134°20'
134°40'
132°
Palau Islands
P h i l i p p i n e S e a
Palau
Islands
Palau
0 5 10 km0 50 100 km
Siaes Corner
Sonsorol Is.
Pulo
Merir
Helen
Tobi
Blue Corner
New Drop-off
Ulong Channel
German
Channel
Koror1
2
3
4
5
Palau
2°
2°
2°
134° 136°
2°
Fig. 1. Republic of Palau. Numbers indicate the most popular shark-diving sites: (1) Siaes Corner; (2) Ulong Channel; (3) Blue Corner; (4) New Drop-off; (5) German Channel.
Table 1
Structure, content and sample size of the questionnaires and interviews conducted for data collection of the economic value of sharks in Palau in 2010.
Respondent n Date Structure Information collected
Tourist
(Pilot)
30 March
2010
Face-to-face
questionnaire
Demographic characteristics; motivations to visit Palau; satisfaction and expenditures on: diving, shark
diving, accommodation, other activities and living costs while in Palau; knowledge of the shark sanctuary and
influence on decision to visit Palau
Tourist
(Main)
216 May/June
2010
Self-administrated
questionnaire
Demographic characteristics; motivations to visit Palau; satisfaction and expenditures on: diving, shark
diving, accommodation, other activities and living costs while in Palau; knowledge of the shark sanctuary and
influence on decision to visit Palau
Dive
operator
10 May/June
2010
Face-to-face
questionnaire
Number of tourists taking dive trips, tourist preferences, main dive attractions and activities, expenditures,
expectations regarding the industry and effects of the creation of the shark sanctuary
Dive guide 20 May/June
2010
Face-to-face
questionnaire
Popular dive sites for shark diving, number of divers visiting sites, average number of sharks per dive in each
site, most common species of shark sighted during dives
Fisher 21 May/June
2010
Face-to-face
questionnaire
Fishing frequency, fishing techniques, income from fishing, level of interaction with sharks, perception of
shark and conservation
Fish market 1 July 2010 Interview Number of fishers supplying fish, fishing frequency, profile of buyers, market volume and market prices
G.M.S. Vianna et al. / Biological Conservation 145 (2012) 267–277 269

information about the demographic characteristics of the divers
visiting Palau, their motivations, satisfaction and expenditures.
The self-administered questionnaire included questions about
expenditure on accommodation, other activities (e.g. land tours)
and living costs while in Palau. It also assessed the diver’s knowl-
edge of the shark sanctuary and its influence on their decision to
visit Palau (Supplementary table 1). Self-administered question-
naires and a printed explanation of the purpose of the research
were available in both English and Japanese and were handed to
the divers either at the end of the dive trips at the dive shops or
at the airport prior to departure from Palau. For this reason, it
was possible to sample divers (both shark and non-shark divers)
engaged in dive activities with the main dive operators of Palau.
The self-administered questionnaire was answered by 216 dive
tourists in May and June 2010. Since this questionnaire required
minimal changes from the questionnaire used during the pilot
study, the information collected by both the pilot and the main
questionnaire were pooled, yielding a sample size of 246 tourists.
The dive operator questionnaire obtained information about the
characteristics of the operator’s business, including the number of
tourists taking dive trips and their preferences, main dive attrac-
tions and activities, expenditures and expectations regarding the
dive industry and effects of the creation of the shark sanctuary.
This questionnaire was answered by 10 dive operators during
face-to-face interviews. However, one incomplete form was dis-
carded from the analysis. Operators interviewed by our study in-
cluded those responsible for most of the dive tourism in Palau.
Twenty dive guides of eight nationalities working for nine dive
operators were also interviewed. The dive-guide questionnaire was
presented in a face-to-face interview that focused on obtaining
information about the most popular dive sites for shark diving in
Palau. It also aimed to provide an estimate of the number of divers
visiting these sites throughout the year, average number of sharks
in each site per dive and most common species of shark sighted
during dives.
Since conservation regulations were likely to affect fishing
activities, fishers were also surveyed in face-to-face interviews
using a standard questionnaire. This provided information about
their fishing activities, techniques, level of interaction with sharks,
perception of shark conservation and income from fishing. The
interviews were conducted in the main fish market in Koror. The
owner of the fish market was also interviewed regarding the fish-
ers’ activities, market and market prices.
All interviews were conducted in accordance with the require-
ments of the National Statement on Ethical Conduct in Human Re-
search (Australia) and the policies and procedures of The
University of Western Australia. The survey was also supported
by the Ministry of Natural Resources, Environment and Tourism
of Palau.
2.3. Estimating business revenue
The study is based on the estimation of financial revenue within
the shark-diving industry, and the magnitudes of key components
of that revenue. We recognize that revenue does not equate to net
economic benefits from the industry. For that we would need to
estimate both the supply curve and the demand curve for shark-
diving services, in order to calculate producer surplus and con-
sumer surplus (Just et al., 2004). This is not attempted due to the
lack of market data that would be needed for statistical analysis
of supply or demand. Nevertheless, revenue provides a useful indi-
cator of the economic importance of the industry, and is consistent
with common economic metrics such as Gross Domestic Product.
This approach also allows us to focus on economic benefits that
are retained within Palau, whereas much of the producer and con-
sumer surplus generated by the industry would be captured by for-
eign businesses and consumers. To further reduce the influence of
leakage in between sectors of the economy, the analysis of the di-
rect, indirect and induced benefits from shark diving was restricted
to quantifying the revenues obtained by businesses directly bene-
fiting from the presence of shark divers (i.e. dive and tour opera-
tors, hotels, restaurants and souvenir shops). The calculation of
the economic benefits from shark diving to the local community
were restricted to wages provided by the dive operators to their
employees and the revenues obtained by the fishers from selling
their catches to shark divers.
We took a conservative approach to all calculations. For exam-
ple, a comprehensive estimate of the economic benefits from
shark-diving would include the salaries generated by businesses
such as hotels and restaurants that are attributable to the presence
of shark divers. However, our analysis was conservative in that it
included only the salaries directly generated by the shark-diving
industry, i.e. dive operators. This approach was adopted to avoid
the risk of including benefits that are not actually attributable to
shark diving. The focus was on economic activity within Palau
and data were drawn from the survey and from official statistics
from the government of Palau (available online). The proportion
of all the divers surveyed that visited Palau mainly or specifically
to engage in shark-diving activities (shark divers) was used to
quantify the percentage of total revenues from all divers that
was attributable to the presence of shark divers (shark-diving
parameter or SDP). A detailed list of variables, parameters, formu-
las and data sources are presented in Tables 2 and 3.
Annual business revenue from sharks (BRS) in the shark-diving
industry and associated businesses was estimated as
BRS ¼ DET Â D Â SDP ð1Þ
where DET is average expenditure per dive tourist per trip (as-
sumed to be the same for shark divers and other divers), D is the
number of dive tourists per year (from official statistics) and SDP
is the proportion of all divers who are shark divers (estimated from
the surveys). DET consists of accommodation expenses, diving ex-
penses and other expenditure such as souvenirs and land-based
tours (from surveys), over the duration of the visit to Palau (Supple-
mentary material 2). Airfares to and from Palau were not included
in the calculation of BRS since there is little or no in-flow from these
expenditures to the local economy in Palau.
To put the shark-diving tourism industry in context, the annual
total number of tourists visiting Palau was estimated based on the
average number of tourist arrivals from 2007 to 2009 (PVA, 2010)
(Supplementary material 3). This was used to estimate the annual
business revenue from tourism as a whole (Table 3).
2.4. Estimating fishers’ income
A component of the business revenue from shark diving is re-
ceived by fishers. Fishers make profits by selling their catch to
the shark divers via a chain of commerce (i.e. fish market, hotels
and restaurants). This represents a source of income that would
not be available if the shark divers were not visiting Palau. Of inter-
est is a comparison of this revenue and the revenue that fishers
would generate by catching and selling the sharks that form the
basis of the Palau shark-diving industry.
Fisher’s income from shark diving (FISD) was calculated as
follows:
FISD ¼ FI Â TFP Â D Â SDP=T ð2Þ
where FI is average annual fisher income in total (from fisher
questionnaire), TFP is the tourism fish-market parameter (the
proportion of fish sold to tourists, based on an interview with a
fish-market representative to determine fish sales to hotels and res-
taurants, multiplied by TP, the proportion of hotels and restaurants

revenue attributable to tourists), and T is the annual number of
tourists visiting Palau (from official statistics, PVA, 2010), (Tables
2 and 3).
2.5. Estimating wages and salaries
Another component of business revenue from shark diving is
dispersed through the Palauan economy by payment of wages
and salaries to employees of dive businesses. Direct community in-
come from shark diving (DCISD) is calculated as follows:
DCISD ¼ D Â SDP Â DED Â W ð3Þ
where DED is diver expenditure on dives (from questionnaires) and
W is the proportion of dive industry income that is allocated to pay-
ing wages and salaries (from operator questionnaire) (Tables 2 and
3).
2.6. Estimating tax revenue
All tourists in Palau (divers and non-divers) pay taxes, including
at least a departure tax and a green tax. Popular tourist destina-
tions, including Jellyfish Lake and most of the popular sites for
shark diving, are situated within the Rock Islands Conservation
Area. To visit these, tourists are also required to pay a Rock Islands
use permit. For the purposes of our study these taxes were
summed and treated as a single value (TAX) in calculations (Table
2). It is important to note that our calculations include the recently
implemented green tax (US$15), mandatory for all the tourists
departing from Palau since November 2009. TAX is not included
within the business revenue (BRS) calculated above. Additionally,
the Palauan government imposes a revenue tax of 4% on most of
the expenditures made by shark divers (and all the tourists),
including accommodation, restaurants and others (such as land
tours and souvenirs). This component of tax revenue is included
within BRS. Tax revenue from the shark-diving industry (TTRSD)
is calculated as follows:
TTRSD ¼ TAX Â D Â SDP þ SDP Â D Â BT Â Diving expenses
þ NSDP Â T Â AT Â Accommodations expenses
þ NSDP Â T Â BT Â Other expenses ð4Þ
where BT is the business revenue tax (4%, see Table 2), NSDP is the
national shark-diving parameter (the proportion of shark divers out
of all tourists) and AT is the accommodation tax (9%, see Table 2).
2.7. Estimating the operational cost of shark diving
A complete analysis of the costs involved in shark-diving tour-
ism would need to include all sectors of the economy of Palau that
provided services to shark divers. Such an analysis was beyond the
scope of the present study. However, data from the interviews of
the dive operators provided an estimate of general costs of fuel,
equipment maintenance, governmental licenses, wages and extra
Table 2
Description of variables and constants used to calculate parameters and estimates of economic benefits related to the tourism and shark-diving industry in Palau.
Abbreviation Constants and estimates Description Values Units Source Comments
D Number of divers per year Sum of number of divers
of each nationality
40 976 No./Year PVA (2010);
Anon. (2004),
Anon (2001)
Based on the percentage of tourist, of
each nationally, who visited Palau to dive
FI Fisher income Average income from
fishing Â days fishing
23 800 USD/Year Fisher
questionnaire
Based on 4 days of fishing per week for
a 50 weeks
ND Number of non-diving
tourists per year
T–D 38 798 No./Year PVA (2010);
Anon. (2004),
Anon (2001)
NSDP National shark-diving
parameter
(SDP Â D)/T 0.11 – Pilot and Tourist
questionnaires;
PVA (2010)
SDP Shark-diving parameter Shark divers/D 0.21 – Pilot and Tourist
questionnaires
Shark diver is defined as a diver who visits
Palau mainly or specifically to dive with sharks
T Annual number of tourists Average number of tourists
visiting Palau from 2007 to
2009
79 774 No./Year PVA (2010) Based on mandatory visitors questionnaires
when entering the country, PVA (2010)
TAX Tourist taxes Rock Islands Use
permit + Green
Tax + Departure Tax
60 USD/Trip Rock Island permit: $25, Green tax: $15
and Departure tax: $20
TFP Tourism fish market parameter Percentage of fish sold to
tourists Â TP
0.44 – Fish market
representative
interview
Based on sellings to hotels and restaurants
TP Tourism parameter T/(Local population + T) 0.8 – PVA (2010);
Anon. (2010)
Indicates the percentage of sales that can be
attributed to tourists instead of local consumers
W Wages parameter Percentage of revenues of
dive industry addressed to
pay wages
0.18 – Operator
questionnaire
BT Business revenue tax Four percent of business
revenues
0.04 –
AT Accommodation tax BT + (Room tax/2) 0.09 – Since 80% of the tourists interviewed during
the survey reported to share the accommodation
room with another person we divided the 10%
‘‘Room tax’’ by two to calculate the tax paid
by each tourist
C Diving costs parameter Percentage of revenues of the
dive industry used to pay costs
of diving operation
0.54 – Operator
questionnaire
Represents the percentage of total revenues
spent by dive operators on: fuel, maintenance,
licenses, wages and extra costs of dive operation

costs involved in the dive operation in Palau. The operational cost
of shark diving (CSDO) was then calculated as follows:
CSDO ¼ Diving expenses Â D Â C Â SDP ð5Þ
where C was the percentage of the total revenues collected by the
dive operators to cover the costs of fuel, maintenance, licenses,
wages and extra costs (Table 2).
3. Results
3.1. Demographics and profile of respondents
Respondents to our survey originated from four principal re-
gions. Europeans constituted the largest group and accounted for
36% of the total. Of this group, 9% of all tourists were from Ger-
Table 3
Description of formulas and sources of data used to calculate parameters and estimates of economic benefits related to the tourism and shark-diving industry in Palau in 2010.
Abbreviation Variables Formula Units Source Comments
Business revenues from tourism
BRD Business revenues
from divers
D Â DET USD/Year
BRND Business revenues
from non-divers
ND Â NDE USD/Year
BRS Business revenues
from sharks
BRD Â SDP USD/Year
BRT Business revenues
from tourism industry
BRD + BRND USD/Year
Economic benefits from shark diving
DCIDI Direct community
income from dive
industry
D Â DED Â W USD/Year Operators questionnaire Represents the expenditure of dive
industry on wages
DCISD Direct community
income from shark
diving
DCIDI Â SDP USD/Year Operators questionnaire Expenditure of the shark-diving
industry on salaries
FISD Indirect value of shark
diving to fisher
FI Â TFP Â NSDP USD/Year Fisher questionnaire; Fish
market interview
CSDO Cost of shark-diving
operation
Diving expenses Â D Â C Â SDP USD/Year Operators questionnaire Represents the expenditure of shark-
diving operations on: fuel,
maintenance, licenses, wages and
extra costs of dive operation
Tax revenues from shark diving
DTSD Direct taxes from shark
divers
SDP Â D Â TAX USD/Year
BRTSD Business revenue tax
from shark diving
SDP Â D Â BT Â Diving expenses
+ NSDP Â T Â AT Â Accommodation expenses
+ NSDP Â T Â BT Â Other expenses
USD/Year BRTSD is the sum of revenue taxes
from shark divers from diving,
accommodation and other expenses
TTRSD Total tax revenues
from shark diving
DTSD + BRTSD USD/Year
Total revenues
TRD Total revenues from
divers
D Â TDET USD/Year
TRND Total revenues from
non-divers
ND Â TNDE USD/Year
TRS Total revenues from
sharks
TRD Â SDP USD/Year
TRT Total revenues from
tourism industry
TRD + TRND USD/Year
Expenditures
DDE Daily diver expenditure DET/Length of stay USD/Day Pilot and Tourist
questionnaires
DED Diver expenditure on
dives
Sum of diving expenses/ Respondents USD/Trip Pilot and Tourist
questionnaires
Average expenditure of a diver on
dives per trip
DNDE Daily non-diver
expenditure
NDE/Length of stay USD/Day Pilot and Tourist
questionnaires
Average expenditure of a non-diver
on dives per trip
NDE Non-diver expenditure
per trip
Accommodation expenses + Extra
expenses + Tours
USD/Trip Estimated based on Pilot
and Tourist questionnaires
Assumes that expenditures on
accommodation and extras by a non-
diver tourist are similar to a diver’s
expenditure on these items. Tours
refers to the sum of one land-based
(US$100.00) and one marine day trip
(US$100.00)
TNDE Total non-diver
expenditure per trip
NDE + TAX USD/Trip
DET Diver expenditure per
trip
Accommodation expenses + Diving
expenses + Extra expenses
USD/Trip Pilot and Tourist
questionnaires
Average of the total expenditures in
the specified categories by divers.
‘‘Extra’’ includes extras expenses
during the trip not specified in the
other categories (i.e. souvenirs, land-
based tours, etc)
TDET Total diver expenditure
per trip
DET + TAX USD/Trip

many and 6% from Britain. Slightly fewer divers of East Asian origin
were interviewed (33% of respondents) with 23% of respondents
originating from Japan. Divers from the Americas accounted for
21% of respondents, nearly all of whom (20%) originated from the
USA. Australian divers accounted for 7% of respondents, and were
the only country represented from Oceania. On average, respon-
dents spent 5.6 days (95% confidence interval (CI) = 5.5–5.7) diving
during their trip to Palau, with an average total trip duration of
8.1 days (95% CI = 7.9–8.3) (Supplementary material 4).
Seventy-five percent of the divers said they were ‘‘interested’’ or
‘‘very interested’’ in shark ecotourism. Shark diving was indicated
as the main or specific reason to visit Palau and was a principal
attraction that determined the choice of holiday destination for
21% of the respondents. Approximately 71% of divers were una-
ware of the creation of the shark sanctuary prior to their trip. Of
the 29% of divers who were aware of the sanctuary prior to their
arrival, 42% reported that this was an important factor in their
decision to choose Palau as a holiday destination.
3.2. Business revenue of tourism and shark diving
Of the 80,000 tourists who visit Palau every year, approximately
51% are divers (Anon., 2004). The business revenue generated by
these divers (BRD) for Palau is US$82.8 million per year (95%
CI = US$76.4-89.3 million), representing about 59% of the total rev-
enue from tourism (Table 4). We estimated that the business rev-
enue from non-diver tourists (BRND) was US$57.2 million (95%
CI = US$52.4-62.0 million) (Table 4), so that the total business
revenue of the tourism industry to Palau (BRT) was estimated to
be US$140.0 million (95% CI = US$129.0-151.0 million) annually
(Table 4).
Approximately 8600 shark divers visit Palau each year. Based on
these numbers, the total business revenue generated by shark div-
ing (BRS) for the Palauan economy was estimated to be US$17.4
million per year (95% CI = US$16.0-18.7 million) (Table 4).
Fishers benefitted modestly from the shark-diving industry by
supplying tourists with their catches via restaurants and hotels.
This was estimated to provide an individual annual income (FISD)
of approximately US$1 180 per fisher (95% CI = US$915-1 440)
(Table 4), or approximately 5% of a fisher’s total annual income
(Tables 2 and 3).
The payment of wages and salaries to people employed in the
shark-diving industry (DCISD) was estimated to be US$1.2 million
annually (95% CI = US$1.1-1.3 million) (Tables 3 and 4), while the
total expenses of the dive operators for logistics, consumables
and maintenance for shark-diving operations (CSDO) was esti-
mated to be approximately US$3.5 million annually (95%
CI = US$3.2-3.8 million) (Table 4).
The annual direct tax revenue from shark divers (DTSD) was
estimated to be US$517 600 (Table 4). In combination with the
business tax revenues generated by the shark-diving industry
and sectors that support infrastructure and services to shark divers
(such as hotels, restaurants and souvenir shops), the total tax rev-
enues from shark diving (TTRSD) collected by the government was
estimated as US$1.5 million per year (95% CI = US$1.4-1.6 million)
(Tables 3 and 4). The combination of business revenue plus tax rev-
enue not already counted within business revenue amounts to
US$18 million per year for the industry as a whole (TRS).
4. Discussion
4.1. The economic value of shark-diving tourism
The Small Island Developing States of the Indo-Pacific are char-
acterized by a limited range of economic opportunities (Ghina,
2003; Scheyvens and Momsen, 2008). However, their tropical loca-
tions, scenic beauty and diversity of marine life often make these
places highly attractive holiday destinations for tourists. For this
reason, tourism is a major source of revenue and increasingly occu-
pies a central position in the economies of these countries (Ander-
son et al., 1999; Anon, 2003; Ghina, 2003; McElroy, 2003; Milne,
1992). In the fiscal year of 2009/2010, the annual GDP of Palau
was estimated to be US$218.4 million (Anon., 2010), with tourism
representing the main source of income and accounting for US$124
million or 56% of the GDP (Anon., 2010). The estimate of the total
revenues of the tourism industry of the present study (US$144 mil-
lion) (TRT, Table 4) was broadly in accordance with this figure,
which provides a degree of confidence in the present results. The
estimate of US$85 million (TRD, Table 4) generated by the diving
industry indicates that this sector accounted for a minimum of
39% of the GDP of Palau. Given that the opportunity to view sharks
was the principal reason for visiting Palau for 21% of divers, the
shark-diving industry accounted for at least 8% of the GDP of the
country.
This result clearly shows the importance of shark diving to the
economy of Palau. We note that our estimates of the economic
contribution of shark diving are of a similar order of magnitude
to those of studies from a range of other localities. In the Canary
Islands, the shark and ray diving industry was estimated to be
worth US$22.8 million annually (cf. US$18 million for Palau). Palau
hosts approximately half of the number of divers that visited the
Canary Islands annually (De la Cruz Modino et al., 2010), implying
that the total expenditure of divers in Palau was roughly twice that
of visitors to the Canary Islands. Additionally, in 2009/2010 shark
diving contributed significantly more to the GDP of Palau (8%) than
the Canary Islands (0.11%) (De la Cruz Modino et al., 2010). These
differences in relative importance reflect both a broader and more
developed resource base in the economy of the Canary Islands than
Palau and also the more sporadic nature of shark and ray encoun-
ters in the Canary Islands. This unpredictability limits the ability of
operators to market their product and the prices that can be
charged for their services (De la Cruz Modino et al., 2010). Divers
with an advanced level of experience are often willing to pay more
and go to specific destinations if they can be assured that the prod-
uct they seek will be delivered (Dearden et al., 2006; Jones et al.,
2009) and this may influence their choice of diving destination.
Shark aggregations in Palau are highly predictable, so the dive
operators can market and sell a product at a greater price with
the expectation of reliable delivery to clients.
In the Maldives, the shark-diving industry based on interactions
with grey reef sharks (C. amblyrhynchos) was estimated to
Table 4
Revenues from shark-diving industry and related sectors in Palau in 2010. CI (95%):
95% confidence interval.
Code Variable Mean (US$) CI (95%) (US$)
Annual business revenues
BRD All divers 82.8 million 76.4–89.3 million
BRS Shark divers 17.4 million 16.0–18.7 million
BRND Non-divers 57.2 million 52.4–62.0 million
BRT Tourism industry 140.0 million 129.0–151.0 million
DCISD Direct community income 1.2 million 1.1–1.3 million
FISD Individual fisher income 1 180 915–1 440
CSDO Costs of shark diving 3.5 million 3.2–3.8 million
Annual tax revenues from shark diving
DTSD Direct taxes (TAX) 517 600 –
BRTSD Business revenue taxes 962000 887000–1.0 million
TTRSD Total 1.5 million 1.4–1.6 million
Total revenues
TRD All divers 85.3 million 78.8–94.7 million
TRS Shark divers 18 million 16.6–19.3 million
TRND Non-divers 59.5 million 54.7–64.3 million
TRT Tourism industry 144.8 million 133.8–154.5 million

complete 77,000 dives and yield approximately US$2.3 million
annually in revenues in 1993 (Anderson and Ahmed, 1993). The
value of this industry was considerably lower than our estimate
for Palau (Anderson and Ahmed, 1993) and to some extent, this
dissimilarity can probably be explained by the 17 year time lag
between studies and substantial differences in methods. In the
Maldives, estimates were based solely on the direct revenues from
diving. Accommodation, restaurants and local businesses that also
benefit from expenditures by divers were not considered. Even
though earnings were likely underestimated, the shark-diving
industry in the Maldives yielded twice as much as the export
earnings of the three major shark fishing industries in the country
for the same period (Anderson and Ahmed, 1993).
The economic benefits of shark diving are not restricted to well-
established tourist markets such as the Canary Islands and the
Maldives. In 2009, a developing tiger shark-diving industry at
Aliwal Shoal, South Africa, was estimated to have an annual value
of approximately US$1.8 million. This industry delivers a special-
ized experience with reasonable predictability and a high rate of
satisfaction (Dicken and Hosking, 2009). In comparison to Palau,
the total revenues were an order of magnitude less, which largely
reflected the difference in the scale of shark-diving industries be-
tween the two locations; in 2009 Palau hosted 8600 divers and
the Aliwal Shoals only 1000 divers. However, when all shark-diving
industries in South Africa are considered together, economic values
are more comparable to Palau. Overall, South Africa hosts approx-
imately 12,500 tourists in activities that include cage diving
with great white sharks (Carcharodon carcharias), snorkeling with
whale sharks and diving with other sharks. These combined
activities yielded a minimum of US$6.8 million yearly to the South
African economy (Dicken and Hosking, 2009; Gallagher and
Hammerschlag, 2011; Hara et al., 2003). Similarly, a shark diving
industry in Moorea, French Polynesia, hosting 15,200 divers per
year, was estimated to generated approximately US$5.4 million
per year (Clua et al., 2011).
Over the past 20 years, a number of studies have assessed the
economic value of sharks and rays as a tourism asset in many local-
ities across the Indian Ocean (Anderson et al., 2011; Anderson and
Ahmed, 1993; Catlin et al., 2010; Dicken and Hosking, 2009; Hara
et al., 2003; Rowat and Engelhardt, 2007; WWF-Philippines, 2006).
As discussed previously, the age of these studies and the variety of
economic models used to calculate values imply that caution is re-
quired when comparisons are made among studies. However, the
outcomes of this work suggest that shark diving (including whale
sharks) could be generating global revenues of more than US$40
million dollars annually. In reality, the value of shark diving in
the Indo-Pacific is likely to be much greater, since the economic va-
lue of many industries in a number of locations such as Fiji, French
Polynesia and Solomon Islands are yet to be quantified (Bru-
nnschweiler, 2009; Clua et al., 2011; Gallagher and Hammerschlag,
2011).
4.2. Comparison with value of shark fishing
From information provided by acoustic tracking studies, sur-
veys of dive guides and community monitoring programs (>1500
logs of shark sightings returned to researchers; Meekan et al.,
unpublished data) approximately 100 sharks were estimated to
be interacting with the industry in the five most popular sites for
shark diving. The consistency in the average numbers of sharks re-
ported by dive guides for each dive site suggested that these esti-
mates were reasonably accurate. An average estimate of 20 sharks
per dive site (thus 100 sharks in five dive sites) is also consistent
with the abundance of reef sharks in aggregations in other locali-
ties such as the Maldives, Johnston Atoll and the Marshall Islands
(Anderson and Ahmed, 1993; Economakis and Lobel, 1998; McKib-
ben and Nelson, 1986). Furthermore, reef sharks can display high
levels of site fidelity (Garla et al., 2006; Papastamatiou et al.,
2009; Speed et al., 2011). In Palau, our comprehensive and ongoing
acoustic telemetry studies show that tagged sharks have been de-
tected on a daily basis at the same site at which they were tagged
for over 2 years (>1.5 million tag detections of 30 tagged sharks).
Sharks transit between nearby sites (2–3 km) on occasion, but
these movements are temporary and individuals tend to return
to sites where they were originally tagged, where they spend up
to 99% of their time. Thus, there is strong evidence that the average
number of reef sharks at popular dive sites remains relatively con-
stant through time.
Our data from community monitoring (Meekan et al., unpub-
lished data), dive guide interviews (this study), tracking work
(Vianna et al., unpublished data) and diving surveys of sharks
throughout Palau (Meekan et al., unpublished data) show that
the shark community in popular dive sites is dominated by grey
reef sharks (approximately 80% of sightings by divers), with white
tip sharks comprising most of the remainder of sightings. This pat-
tern is consistent in both space and time. Using the estimate of an-
nual business revenues of US$18 million, the present value of
approximately 100 sharks interacting with the tourism industry
in the five major Palauan dive sites over 16 years (a conservative
estimate of life span of both grey and white tips (Smith et al.,
1998)) was approximately US$200 million (assuming real discount
rate of 5%).
The significance of reef sharks in Palau and other tropical local-
ities as a non-consumptive resource contrasts strongly with their
value as a fishery (Anderson and Ahmed, 1993). The price of a
set of shark fins (first dorsal, both pectorals and lower caudal) var-
ies according to the species and market fluctuations, and ranges
from US$20 to US$90 (Clarke et al., 2007). While fins are valuable,
the shark meat is considered to be of poor quality, with an average
price per kilo ranging from US$2 to US$4.6 (Chen and Phipps,
2002). A large grey reef shark, which is the biggest of the sharks
regularly interacting with divers in Palau, weighs approximately
40 kg (Wetherbee et al., 1997). Considering that the sharks inter-
acting with the tourism industry tended to be adults, the maxi-
mum total revenues that could be obtained from the targeting of
these 100 animals by a fishery for the international market was
approximately US$10 800. This represents 0.006% of the present
value of the same sharks used as a non-consumptive resource over
16 years.
4.3. Socio-economic benefits from shark diving
The shark-diving industry spent approximately US$1.2 million
on wages and salaries to employees resident in Palau. These are
a key benefit of the industry. The industry is labor-intensive, with
relatively low guide-to-diver ratios and also requires employment
of staff for maintenance, boat operation, catering and office work.
Therefore, the shark-diving industry results in dispersion of reve-
nues and makes a contribution to the economy by generating jobs
and income to the community and taxes to the government (De la
Cruz Modino et al., 2010; Milne, 1992). A proportion of salaries
paid to staff is used to purchase additional goods and services,
which in turn have a multiplier effect, generating more jobs and
further dispersing the revenues from shark diving (Lejárraga and
Walkenhorst, 2010; Milne, 1992). Shark divers in Palau are also
responsible for generating jobs in different sectors of the tourism
industry such as hotels, restaurants and souvenir shops. Wages
and salaries for these workers and multiplier effects were not
quantified by our study and thus it is likely we have underesti-
mated the economic benefit to Palau of the shark-diving industry.
Taxes paid by shark divers in Palau generated an income of
approximately US$1.5 million, accounting for approximately 14%

of the tax revenue collected by the Palauan Government in 2008
(Anon., 2009). Compared to other industries, the taxes paid by
shark divers were the third highest contributor to the gross tax
revenue in Palau and were roughly 24 times higher than the taxes
collected from the fishing industry in 2008.
We estimated that the provision of fish to restaurants for con-
sumption by shark divers gave an additional annual income of
approximately US$1 200 per fisher. According to the management
of the fish market, 55 fishers regularly sold their catches to supply
both the tourism industry and the local population through the
market. If these fishers were engaged in shark-fishing activities,
the maximum revenues that they could obtain for the once-off cap-
ture and sale of the sharks interacting with the tourism industry
would be around US$196, or only 16% of the annual income each
one would have earned by keeping these sharks alive.
The economic benefit from shark diving to the economy of Pa-
lau can be divided into various components: direct (the amount
spent by visitors on shark-diving activities), indirect (the amount
spent by shark tourists on additional services and products), in-
duced (the amount spent by shark-dive operators on inputs such
as wages and fuel) and tax receipts. The magnitudes of indirect
and induced benefits are dependent on the links between different
sectors of the Palauan economy and the leakage of revenue off-
shore to foreign economies (Anon, 1996; Lejárraga and Walken-
horst, 2010; Milne, 1992). While our study quantified the major
direct benefits generated by the presence of shark divers, estimates
of indirect and induced benefits were restricted to the expendi-
tures of the shark-diving operators on wages for the employees
and the revenues obtained by fishers from the selling of fish to
shark-diving tourists via the local fish market. These two groups
were considered the most relevant Palauan stakeholders liable to
benefit from the shark-diving industry. A full analysis of indirect
and induced effects of the shark-diving industry was beyond the
scope of this study, since it would have required quantification of
benefits and wages generated through third parties not directly in-
volved with shark diving (Lejárraga and Walkenhorst, 2010; Milne,
1992). Furthermore, secondary links are affected by leakage of cap-
ital to overseas markets (Lejárraga and Walkenhorst, 2010; Meyer,
2008), which are typically high in small island developing states
due to the import of manufactured goods (Anon, 1996; Meyer,
2008; Milne, 1992).
It is possible that the future establishment of shark sanctuaries
in other countries would increase the supply of shark-diving
opportunities, with negative effects on Palau. However, this impact
is likely to be more than offset by increases in demand. There has
been rapid growth in shark-diving (and other megafauna) tourism
world-wide (Gallagher and Hammerschlag, 2011) spurred on, in
part, by increasing populations and material wealth throughout
East and South East Asia. Furthermore, loss and damage to coral
reef ecosystems is increasing (Bellwood et al., 2004) and is paral-
leled by a rapid decline in reef shark populations worldwide
(Ward-Paige et al., 2010; Robbins et al., 2006). These declines in
shark numbers are occurring even in coral reef systems that are
intensively managed, such as the Great Barrier Reef (Robbins
et al., 2006). Considering these trends and the results reported
here, it is unlikely that shark fishing could be more profitable than
shark diving under any realistic future scenario. Our study shows
that fishers would make greater returns by supporting the shark-
diving industry (e.g. by supplying fish to restaurants) than by com-
peting for the same resource.
4.4. Possible negative impacts of shark diving
The effects of the presence of large numbers of tourists on the
relatively small island nations may not always be positive (Anon,
1996; Ghina, 2003; Scheyvens and Momsen, 2008). Among the
main problems, the infrastructure needed to support the tourism
industry can impose increased pressures on limited natural re-
sources (Anon, 1996). When poorly regulated, tourism based on
the observation of marine megafauna can also cause disturbances
to the animals, which can lead to negative behavioral and ecolog-
ical consequences (Lusseau, 2004; Williams et al., 2006). SCUBA
diving can also have damaging effects on reef communities (Davis
and Tisdell, 1995; Hawkins et al., 1999; Poonian et al., 2010;
Tratalos and Austin, 2001).
Long-term interactions between sharks and divers have been
suggested to interfere with the behavior and ecology of shark pop-
ulations. A number of studies have suggested that shark provision-
ing has the potential to alter feeding habits, metabolic rates,
relative abundance, residency and reproductive patterns of sharks
(Brunnschweiler and Baensch, 2011; Clua et al., 2010; Fitzpatrick
et al., 2011; Maljkovic and Cote, 2010). However, as yet there is lit-
tle unequivocal evidence of such effects. The presence of divers in
the absence of food stimulus has also been associated with short-
term changes in the behavior of some sharks (Cubero-Pardo
et al., 2011; Smith et al., 2010). The large numbers of sharks ob-
served at dive sites and the high level of site fidelity demonstrated
by our tracking data (Vianna et al., unpublished data) suggests that
sharks are likely to be habituated to the presence of divers at pop-
ular dive sites in Palau. However, the possible impacts of diving on
the behavior of reef sharks at these aggregation sites is still unclear
and needs to be addressed.
Socio-cultural disturbances to resident populations due to tour-
ism are often caused by local people lacking the necessary qualifi-
cations to supply the services required by the tourism industry.
This can cause the local communities to receive limited access to
the economic benefits of tourism (Anon, 1996; Valentine, 1992).
Palauans have an extensive knowledge of the marine environment
and a tradition as seafarers and fishers as a central part of their cul-
ture that has developed over millennia (Johannes, 1981). Thus,
they provide a highly-skilled work force for the dive industry.
Additionally, they provide part of the shore staff of the dive oper-
ators and related businesses, so that a significant part of the reve-
nues gained from shark diving reaches local communities through
the payment of wages and salaries. This in turn flows through to
other parts of the Palauan economy.
4.5. Effects of shark fishing ban on the shark-diving industry
In 2009, Palau created a nation-wide shark sanctuary in the
waters of their Exclusive Economic Zone. We found that only 29%
of divers had knowledge about the creation of the sanctuary prior
to their arrival in Palau (Supplementary material 1), probably
reflecting the recent nature of sanctuary legislation. However, it
is important to note that a high percentage of divers (78%) stated
that the sanctuary would have a reasonable degree of importance
on a decision to re-visit Palau, suggesting that the creation of the
sanctuary could play an important role in the selection of a desti-
nation by shark divers in the future.
4.6. Potential sources of error
Two potential sources of error in our estimates of economic val-
ues are identified: firstly, the degree to which our sample was rep-
resentative, and secondly the accuracy of our estimates of the
economic value derived from non-diving activities. The length of
stay of tourists in Palau was correlated with nationality (Anon,
2001). Considerable effort was made in our study to obtain sam-
ples that included tourists of most nationalities involved with the
shark-diving industry. However, the final sample included rela-
tively low numbers of Taiwanese and Koreans, who tend to have
shorter-than-average stays. This could have resulted in an over-

estimation of the average length of stay, and thus an over-estimate
of the economic value of tourists. However, this is unlikely to have
had a large effect on our results, given that Government surveys
showed that the total tourist expenditure per trip was similar irre-
spective of nationality (Anon., 2004).
In the case of Taiwanese divers, travel was organized by Taipei-
based companies, so that a smaller proportion of revenues may re-
main in Palau, thus leading to an over-estimate of their value to the
Palauan economy. Nevertheless, Taiwanese companies typically
have a Palauan workforce as part of their staff, which reduces
our potential for error.
Another possible cause of sample bias is that divers were sur-
veyed only in March and May/June 2010. Any seasonal variations
in the proportion of divers from different nationalities were not
captured by our results.
The second possible area of error was the estimation of expen-
ditures of non-diver tourists, to inform our estimate of the value of
the tourism industry as a whole. Unlike the diver-related values,
this was not based on a purpose-conducted survey, but rather on
collation of secondary data from a range of sources, including
expenditures on accommodation, food, souvenirs and non-diving
tourist activities. Nevertheless, as noted earlier, an International
Monetary Fund estimate of tourism incomes for Palau for 2009/
2010 was US$124 million (Anon., 2010), broadly in accordance
with our estimate (US$144 million).
5. Conclusion
Palau’s success in harnessing sharks as a profitable, renewable
and non-consumptive resource presents a model applicable to
other diving destinations throughout the tropics. Shark diving pro-
vides an attractive economic alternative to shark fishing, with dis-
tribution of revenues benefiting different sectors of the economy
including the tourism industry, government and the local commu-
nity. A well-managed shark-diving industry promotes the ecologi-
cally and economically sustainable use of these animals and
provides a robust and compelling argument for the conservation
of shark populations.
Acknowledgements
The authors would like to thank the Minister of Resources,
Tourism and Environment, Mr. Harry R. Fritz, and the Government
of Palau for supporting this study and allowing access to govern-
ment statistics and data. Financial support for this study was pro-
vided by The Pew Charitable Trusts. Other financial or in-kind
support was provided by the Micronesian Shark Foundation
(MSF), AIMS and UWA. Tova Bornovski of MSF aided in liaison with
government departments and research permits. Our thanks to the
managers and staff from the dive operators of Palau, in particular:
Tova Bornovski and staff from Fish and Fins, Hiroshi Akino from
Day Dream, Mari Kishigawa and Irish Billones from Palau Diving
Center, Yumiko Muya from Maml Divers, Nobuhito and Hashizo
Hashimoto from Cruise Control, Katsuyoshi Yamaguchi from
Splash, Ryuji Ishiura from Blue Marlin, Han Joosung from Sea
World, Saburo Ishige and Annabel Fernandez from Antelope, Hiro-
masa Shimoji and Hiroshi Nagano from Aqua Magic, Dermot Keane
from Sam’s Tours and Keobel Sakuma from Pleasure Island. We
would also like to thank Mr. Darin De Leon and staff from Palau
Visitor Authority, Department of Planning and Statistics, Phillip
Reklai and staff from Happy Fish Market, Drs Pat and Lori Colin
from the Coral Reef Research Foundation, Nannette Malsol from
the Bureau of Marine Resources and Ms Blair Phillips from Belau
Tourism Association. We thank the tourists, dive guides and fishers
who donated their time to answering the questionnaires and so
made this study possible. Finally, we thank two anonymous
reviewers for their helpful advice.
Appendix A. Supplementary material
Supplementary data associated with this article can be found, in
the online version, at doi:10.1016/j.biocon.2011.11.022.
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